Computing UpdateThe worlds largest chipmaker is planning a huge spree

Computing UpdateThe worlds largest chipmaker is planning a huge spree 

TSMC will increase the cost by almost 50% in 2021

Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, is planning a record-breaking spree in 2021.

On an earnings call, the corporate announced plans to spice up capital expenditures (CapEx) by up to $28 billion this year, during a push to expand production capacity and further develop its technology.

The chip giant said the heavy investment is required to deal with the worldwide semiconductor shortage, created by a spike in demand among car and electronics manufacturers, and to maximize opportunities around 5G and high-performance computing (HPC).

TSMC earnings

On an equivalent call with investors, TSMC also announced record-high revenue and profit for Q4 2020; gross sales reached $12.68 for the quarter, up 22% year-on-year, while net income rose by 23% to succeed in $5.1 billion.

The company said it had benefited handsomely from a surge in demand for electronics caused by the pandemic and remote working explosion, also because of the rise of 5G-enabled devices. Despite vaccine rollout and prospects of a rather more normal 2021, TSMC believes demand will remain high as suppliers seek to stockpile components.

To meet demand, TSMC had previously begun plans to create a $12 billion foundry in Arizona, USA. Mark Liu, TSMC Chairman, confirmed the goal remains in situ but will depend upon the economic situation and other factors.

The firm is additionally preparing to bolster the assembly capabilities of its facility in Nanjing, eastern China, despite announcing in May that it might terminate its relationship with telecoms and electronics giant Huawei.

In Q1 2021, TSMC said it expects to require between $12.7 billion and $13 billion in revenue, a rise of just about $3 billion over forecasts for an equivalent quarter last year.

“Moving into half-moon 2021, we expect our business to be supported by HPC-related demand, recovery within the automotive segment, and a milder smartphone seasonality than in recent years,” said Wendell Huang, TSMC CFO.

According to Liu, demand for semiconductors within the HPC industry will soon outstrip the smartphone sector, becoming the most driver of growth for the corporate within the years to return.

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